Hospital donations jeopardized by CEO's ouster

A month after El Camino Hospital abruptly announced that it would terminate CEO Ken Graham's contract at the end of the fiscal year, June 31, many at the hospital remain perplexed, and even vexed by the news.

Judging from the sentiments expressed by three people — a member of the El Camino Hospital Foundation's board, the head of the nurses' union at the hospital, and a Los Altos resident — there are many reasons fueling the confusion and anger that surround Graham's ouster. However, one complaint stands out: the perceived lack of transparency about the impetus behind the decision.

"I felt that it was very unprofessionally done," said Willem P. Roelandts, a board member of the El Camino Hospital Foundation, the fundraising arm of the hospital.

Roelandts said that he and other foundation board members were frustrated, angered and "dumbfounded" by the decision, which the foundation did not learn about until after it had been made public.

"The foundation board was not told ahead of time or even asked their opinion," he said — a move he felt was inconsiderate. Roelandts was frustrated further when members of the hospital board came to a foundation board meeting to explain their decision and field questions.

The decision has hurt the foundation's fundraising ability, Roelandts said, adding that he and his colleagues have already received calls from donors asking if the hospital is faltering. He said he is sure the foundation will lose out on money as a result of Graham's termination.

"The way that Mr. Graham was basically fired — it really created doubts," he said. "It is very difficult to collect money when there is an impression that the hospital is in trouble."

That perception is particularly frustrating for Roelandts, who said that, in his opinion, nothing could be further from the truth. "El Camino Hospital is probably the finest hospital in the region. Mr. Graham has really done a lot of things."

Shocking statement

At the hospital board meeting on March 9, Roelandts, along with several others, publicly expressed their distaste with the decision to fire Graham.

And while most of the board, along with the CEO himself, did not publicly respond, one board member did.

Dave Reeder, who voted against firing Graham, said that he could not disclose what was discussed in closed sessions. Then he said something that shocked one Los Altos resident who had come to the meeting in the hopes of getting his questions about Graham's termination answered.

"I'm not sure I understand why we did what we did," Reeder said. "Most of us will probably never know why that decision was made. But the majority of the board decided they wanted a different CEO."

Krikorian, a retired child psychologist living in Los Altos, said he came to the meeting after reading about Graham's ouster in the local news media.

"It seemed unusual to me," he said, referring to the 3-2 decision to dismiss Graham. "That tells me there were some issues."

He said that he feels a certain ownership of the hospital, not only because he pays taxes to support its operations but also because it is likely where he or his wife will go if they fall ill. Krikorian said he was upset to see how unwilling the board had been to disclose the reasoning behind its decision.

"The hospital belongs to us," he said, paraphrasing a quote he had read from long-time hospital booster Norma Melchor. "The truth should come out."

Tight-lipped board

The tightly worded official statement announcing Graham's termination — when it did speak of Graham's tenure — spoke about it favorably. Wesley Alles, chairman of the board, focused on Graham's accomplishments in comments included in the statement. He noted that the CEO headed the organization during its re-designation as a nurse Magnet Hospital and was there for the establishment of the Center for Advanced Radiosurgery.

During his time at El Camino, Graham oversaw the construction of the new, seismically sound, state-of-the-art hospital building, as well as the acquisition and opening of the Los Gatos campus, facts not mentioned in the release.

That's not to say that Graham didn't also hit some rough patches during his time at El Camino.

Graham presided over one of the toughest financial periods El Camino has faced in more than a decade. In July 2010 the hospital began its current fiscal year in the red and in September announced that about 140 employees, including service workers, nurses, and administrators, would likely lose their jobs.

However, while some administrative positions ultimately were cut, thanks to negotiations, buy-outs and a massive shuffling of positions, no nurses or service workers were forced to leave. And although the fiscal year started bleakly, the hospital appears to be on track to turn a profit by the end of June.

It is possible that Graham's handling of the crises may have led to his ouster, according to Ron Shinkman, the publisher and editor-in-chief of Payers and Providers —a weekly publication covering healthcare business and policy news.

Shinkman said that it can be quite a juggling act to earn the favor of physicians, nurses unions, service workers unions, patients, the community and board members all at the same time. "If you aren't pleasing these constituencies, they may try to force you out."

Yet, despite calls for an explanation, the board has remained mum. In response to a request to speak to members of the foundation board about Graham's departure, hospital spokeswoman Chris Ernst wrote in an e-mail, "the employment agreement was terminated without cause. ... As with any personnel matter and as part of the mutual non-disparagement clause within the employment agreement, further discussion on this matter would be in conflict of the agreement."

Financial turn-around

Pat Briggs, president of the El Camino nurses union, said that in some ways she was surprised by the decision.

"The surprise is that the hospital has gone through quite a financial turnaround in the last few months," Briggs said. "Since the June financials, there has been a significant turnaround in financial stability."

The union leader said that she has not been surprised by the board's lack of communication with the public regarding its decision.

"The board has a huge lack of transparency," Briggs said, criticizing the board for making the majority of its decisions in closed session and holding its meetings in a way that is confusing for the public and the press.

The El Camino Hospital board made the decision to discontinue Graham's contract during a closed session portion of its Feb. 9 meeting. It announced the decision at the end of the closed session, at about 10:20 p.m.

Alles, Patricia Einarson, MD, and Uwe Kladde voted in favor of the decision; Reeder and John Zoglin were opposed.

Briggs said holding closed sessions that go late into the night, means that when the board finally reconvenes into open session, most, if not all, of the public has gone home and does not hear about any significant decisions made in private.

Roelandts would not speculate about what specifically prompted the board to dismiss Graham, but he did say that, broadly speaking, it appeared that the reasons were "political."

Whatever the case, Roelandts said he wishes the board would have given the foundation at least some warning.

"We are the people who bring in the money; at least they should treat us with a little bit more respect," he said.

This story contains 1262 words.

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Posted by Bob, a resident of Old Mountain View
on Mar 18, 2011 at 3:25 am

Over-paid and over-stayed, Ken Graham pretended energy deregulation wasn't in effect, during WAR. Heard of war? It gets expensive, then COSTLY. So he is going, like a number of the greedy teachers, who don't remember their own history lessons.

Also, who in the world would put up such lousy internet, at El C, and then pretend the cost structure could support ALL the construction undertaken, and all the consequences, of too-high salaries paid, years later? Property taxes won't cover more adventure.

Posted by ECH Staffer, a resident of Shoreline West
on Mar 18, 2011 at 6:33 am

Ken Graham is a fantastic CEO. Many of us are sorry to see him go. Poor decision making by the ECH Board.

Posted by David, a resident of another community
on Mar 18, 2011 at 11:52 am

I have been following all the comments in both the Los Town Altos Crier and the Mountain View Voice regarding the early termination of the CEO (Ken Graham) contract. Considering the agreement that the CEO and the Board have not to discuss the details of this action, certain people in the community somehow seem to think that they know the details or they are angry because they want to know the details and yet they are not entitled to know. All of the comments seem speculative and definitely not constructive.
Ken Graham may have been well liked, so was Jimmy Cater and he did not survive beyond his four year term.
I, like many other community members, do not attend the Public Board meetings. However, they are all recorded and can be viewed on line.
Having viewed these and reflecting back on the financial statements that were made available, it would appear that the Board decision was a business decision. A summary of the review would show that there was a significant loss in net revenue from one tear to the next resulting in a $11 Million loss. When the consultants to rescue the hospital were contracted, they identified over $60 Million in "waste".
It has been reported that a large percentage of the cost reduction will have to be paid to the consultants. This would be another huge loss in revenue. These events are all lost opportunities for revenues.
I, for one, feel that the Bard made the right decision. I was reluctant to donate generously to the Foundation, but I have changed my opinion, the Board decision was right for me. I now know that my donation will be used wisely.
I read a disturbing quote made by one of the Board members that "I do not know why the decision was made". Looking at the Board meetings and the attendees, he was present at all the meetings. To make such a statement would suggest that he was totally tuned out or sleeping. I would encourage the voters who elected him to look for a more engaging representative. I am a resident in LAH.

Posted by NC, a resident of another community
on Mar 19, 2011 at 6:54 pm

If you review the videotaped financial reports from the last several board meetings you will see that the hospital is ahead of projections in turning things around and that is accounting for the cost of consultants.

Posted by Brigitte Fox, a resident of Cuesta Park
on Mar 22, 2011 at 5:55 pm

Board member Dave Reeder should be commended for his courageous revelation that the El Camino Hospital Board members don't know why they made the decision to terminate Ken Graham. The door is now open for Mr.Alles, Mr.Kladde, and Dr.Einarson to show the same fortitude by admitting that a mistake was made and rescinding their decision.
As is clear from Mr. Reeder's statement, there is no urgency to Ken Graham's departure. At the very least, Mr. Graham should be allowed to serve out the term of his contract in order to avoid wasting millions of dollars. El Camino Hospital cannot afford to lose a competent and caring leader and jeopardize much needed donations on the whim of three people who feel thay want "a different CEO."

Posted by Show Me the $$$, a resident of St. Francis Acres
on Mar 28, 2011 at 4:22 pm

I think this is all a farce. There are only 30 days in June, so that means the mutual departing probably won't happen. The CEO will be saved by a legal loophole due to a stupid typo in the contract.

Posted by David, a resident of another community
on Mar 30, 2011 at 8:46 pm

After reading Brigitte Fox's comment and her letter in the Los Altos Town Crier, one wonders how objective she can be regarding this issue. She certainly would not be priveleged to detailed information about the CEO. Is she infatuated with this person? Her comments are totally of the wall and do not seem to reflect the majority of the employees at hospital. Maybe counseling is indicated for her.